What is an Anchor Store in Retail? Definition, Examples and Impact on Retailers

It’s a Saturday, and a would-be customer has a long shopping list. They need some groceries, new boots, a gift for their mother and some sewing supplies. They also need their phone repaired. They could spend their whole day driving to different stores to get it all done, or they could head to their local shopping center, hit up its anchor store tenant and then check off the rest of the list with smaller retailers in the same location. 

This is the power of the anchor store: by offering convenience and big name draw to customers, it has the power to benefit all other retailers situated around it. They have been a pivotal part of shopping center planning for decades, defining a lot of brick and mortar retail (for better or worse).

In this blog, we’ll go over anchor stores and their impact on the retail landscape:

• What is an anchor store?
• Examples of anchor stores
• The impact of anchor stores on retail
• The future of anchor stores

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What is an anchor store?

An anchor store is a large retailer in a shopping center by drawing in foot traffic that is then dispersed to other stores around it. 

Anchor stores have long been the cornerstone of shopping centers. In the late 19th and early 20th centuries, pioneering department stores like Macy’s in New York and Marshall Field’s in Chicago became destinations in their own right, drawing customers with their wide range of products and services. 

In the mid-1950s, architect Victor Gruen codified the modern shopping center and anchor store. The first open air shopping center in the US, located in Detroit, featured a department store anchor surrounded by shops and cafes thanks to his efforts. 

As retail evolved, the concept of the anchor store expanded, encompassing not just traditional department stores but also big box retailers such as Walmart and Target, as well as specialty giants.

Key developments in the history of anchor stores

• The rise of shopping malls: after Victor Gruen pioneered the American shopping center, the subsequent explosion of shopping malls in the mid-20th century significantly boosted the role of these stores, as they were crucial in attracting shoppers.

• Consumer demand for one-stop shopping: growing preferences for convenience have led anchor stores to diversify their product offerings, evolving from specialized goods to a wide array of products and services under one roof. Consider how Walmart went from an affordable goods retailer to an all-in-one affordable good and grocery store with cafes, photo services and more. 
• The emergence of big box retailers: big box retailers like Walmart and Target serving as anchors have shifted the retail landscape, increasing competition among different types of big name shopping center tenants. 

Characteristics of an anchor store

No matter the type, they tend to share key characteristics, such as: 

• Size and scale: anchor stores are typically characterized by their expansive size, often occupying tens of thousands of square feet and/or roughly 30% of a shopping center. This allows them to offer an extensive selection of products, differentiating them from smaller retail entities. For example, department stores like Macy’s and Nordstrom provide a vast array of items ranging from apparel to electronics, all under one roof. Some luxury stores can be smaller than department store anchors, but they’re often still larger than the average retailer. 
• Brand recognition and draw: brand recognition is a key factor in an anchor store’s ability to attract customers. Retail giants such as Target and Walmart leverage their well-established brand identities to draw significant foot traffic, not just benefiting themselves but also the smaller retailers within the same shopping complex.
• Product range and diversity: most anchor stores boast a wide range of products and services, making them one-stop shops for consumers. IKEA, for instance, offers a comprehensive selection of home furnishings along with in-store restaurants and children’s play areas. Luxury anchors may be more focused with a smaller product range. 
• Location within shopping centers: anchor stores are typically located at opposite ends or key points of the mall to maximize visibility and accessibility. This strategic positioning helps distribute foot traffic evenly throughout the premises, ensuring smaller shops also receive attention from passing shoppers.

Examples of Anchor Stores

Not all anchor stores are the same. Department stores, big box stores and luxury stores can all function as anchor stores that bring in different kinds of customers. 

Department stores, the original anchor stores

Department stores served as anchor stores even before shopping malls took on their modern form. Some popular examples are:

• Macy’s: an American department store chain known for its wide range of products, including clothing, accessories and home goods. Macy’s was opened in 1858, and became one of the first department stores to make headway into suburban American shopping centers. 
• Nordstrom: a department store that offers high-end clothing, accessories, beauty products and more, focusing on customer service. The first Nordstrom opened in Seattle in 1901, but the company didn’t take on its giant department store format until the 1960s.
• JCPenney: a department store that provides a variety of clothing, home decor and appliances, catering to a broad customer base. While early locations were in downtown neighborhoods, JCPenney became a shopping mall anchor store after the 1960s. 
• The Bay: a Canadian retail giant (and previously fur trader) with an extensive selection of merchandise, spanning from clothing and beauty products to home furnishings and electronics. Established in 1670, The Bay is one North America’s oldest retailers and the oldest incorporated joint stock retailer in the English speaking world.

Big box retailers, the hot new anchor stores

Big box retailers—general merchandise and speciality mega-retailers whose buildings typically resemble a big box—give department anchor stores a run for their money. Some big names include: 

• Walmart: the world’s largest retailer, offering a wide assortment of goods and groceries at low prices. Walmart didn’t start out as a shopping center anchor store—its first location in 1962 opened in a rural area not being served by other retailers. Walmart supercenters, the format that typically serves as an anchor store today, started cropping up in the 1980s.
• Target: a competitor to Walmart, known for its trendy, high-quality merchandise ranging from home decor to clothing to food. Target didn’t start out as Target—it opened in 1902 as Goodfellow Dry Goods, then became the Dayton company before finally opening a store named Target in 1962. 
• Best Buy: as a more focused big box store, Best Buy specializes in consumer electronics, providing a wide range of gadgets and appliances. It is the leading consumer electronics store in the US, anchoring malls and shopping centers across America and Canada.

Luxury and niche retailers, anchor stores in upscale shopping centers

These anchor stores cost a little more to shop at, so they’re typically in shopping centers with other luxury or niche retailers. You’d be hard pressed to find a Walmart and a Saks Fifth Avenue anchoring the same mall.

Some prominent examples are: 

• Neiman Marcus: an upscale retailer that offers luxury fashion brands, high-end beauty products and exclusive designer collections. Neiman Marcus started as a specialty store offering clothing that was both high quality and ready to wear, a relative rarity at the time of its founding. 
• Saks Fifth Avenue: a retailer—owned by notable Canadian anchor store The Bay—that specializes in designer apparel, accessories and luxury goods. While it opened in the 1860s, Saks didn’t evolve into a department store until nearly 40 years later. 
• Holt Renfrew: a luxury department store chain based in Canada with a curated selection of high-end fashion, accessories and beauty products. Once a mail-order retailer, the first department store style Holt Renfrew opened in the 1930s. 

International examples of anchor stores

Anchor stores aren’t just a North American phenomenon.

Some retailers anchoring shopping centers around the world include:

• Harrods (UK): a world-famous luxury department store known for its vast product range and exclusive services. 
• Galeries Lafayette (France): a French retailer that offers a range of brands and products, from luxury to everyday goods, in a historic setting. 
• Takashimaya (Japan): a leading department store chain offering high-quality products and services, from fashion to gourmet food. 
• El Corte Inglés (Spain): Spain’s largest department store group, selling goods from clothing to groceries. 

The impact of anchor stores on the wider retail ecosystem

Anchor stores have long been pivotal in shaping the retail landscape, from driving economic growth to influencing market trends and consumer behavior. 

Their presence in shopping centers and malls significantly impacts the surrounding businesses, local employment rates and the broader retail industry, both positively and negatively.

Economic impact

Anchor stores, with their broad product ranges and brand recognition, draw significant foot traffic. This has the potential to benefit neighboring smaller retailers, as long as the demographics match. For instance, a large department store like Macy’s attracts customers looking for clothing and accessories, who are then likely to visit adjacent stores targeting those customers and their budgets. 

This spillover effect can significantly increase sales for smaller businesses, contributing to the overall economic health of the shopping center and the local economy. The presence of a well-known anchor store can also enhance the property value of the retail space, making it a coveted location for other retailers. 

However, anchor stores can also have a negative economic impact. Not all anchor stores are equal, with big box stores—Walmart in particular—drawing criticism for their anti-competitive influence on smaller stores. In fact, Walmart cut its competition in half by the 1990s as smaller discount retailers closed in response to their rapid expansion. 

The foot traffic draw of an anchor store is also a double-edged sword. When an anchor store closes its doors, everyone suffers as customers head elsewhere. Shopping centers that have more than one anchor, or who have an innovative way to repurpose anchor tenant space (such as with condo units) may be more stable than those anchored by only one big retailer. 

Employment

One study found that large anchor stores can offer better wages compared to small businesses. 

The positive effects on wages and employment aren’t always restricted to employees of the anchor stores. For example, a big box retailer like Target not only hires a large workforce for its operations but also has the potential to boost employment in nearby stores, restaurants and services that cater to the increased customer base brought in by the anchor.

But their effect can also be negative, especially depending on the type of store. Thanks to their varied inventory, big box retailers can lead to more store closures than openings as they out-compete established retails. This can lead to less jobs available in the community overall. 

Market trends and consumer behavior

Anchor stores significantly influence shopping habits and retail trends.

Their adoption of technology, for instance, sets standards for the retail sector. With anchor store retailers integrating omnichannel shopping experiences like BOPIS, consumers have come to expect a seamless blend of online and in-store shopping across the board. These expectations radiate out to the retailers around like, much like the foot traffic they bring in. 

The future of anchor stores

With store closures in the news, the future of anchor stores may seem uncertain. However, even as more malls develop away from big key tenants, they’re not going away–they’re just moving.

Moving away from malls and into other shopping centers

Malls and anchor stores are breaking up—they’re more likely to be in open-air or strip shopping centers now. Nordstrom’s mall stores make up less than half of their revenue, after all. There’s no point in sticking around in enclosed malls if that’s not where customers want to shop.

Anchors pulling out of malls has a domino effect. As mall vacancies reach 20-year highs, smaller tenants follow these stores out of enclosed malls. Some retailers, like Gap, are now aiming for 80% of their stores to be in strip malls. These effects will reinforce themselves—anchors will go where the customers are, other retailers will follow thems and customers will follow the retailers. 

Shifts in consumer preferences and the potential impact on the relevance and operations of anchor stores

The rise of online shopping poses challenges to traditional anchor stores, necessitating adaptations to remain competitive. 

Many have embraced ecommerce, offering online shopping options with in-store pickup or home delivery. For example, Nordstrom has enhanced its online presence and integrated it with physical shopping experiences, offering services like curbside pickup. 

Anchor stores are the glue that holds shopping centers together

Anchor stores play a pivotal role in retail, serving as magnets that draw in customers and shape the dynamics of shopping centers. From department stores like Macy’s and JCPenney to luxury retailers such as Neiman Marcus and Saks Fifth Avenue, these key tenants define the retail landscape with their diverse product offerings and brand recognition. 

Despite the challenges posed by changing consumer preferences and the rise of online shopping, anchor stores remain relevant with massive influence on retail as a whole. For better or worse, they will continue to shape market trends, influence consumer behavior and drive—or inhibit—economic growth. 

To ride the wave, retailers need to pay close attention to the key tenants in their shopping centers. Do their demographics match yours? Are they likely to stick around? Are there multiple anchors the shopping center can count on? Is your business keeping up with the anchor store’s innovations? And do you have the technology to offer an enticing experience to the foot traffic anchor stores bring in? 

Frequently asked questions 

What is an anchor store in retail?

An anchor store is a large, well-known retail store that serves as a primary draw for customers to a shopping mall or center, driving foot traffic that benefits smaller retailers within the same complex.

While these stores tend to be larger than the average retailer, not all of them are the size of a Walmart or a Macy’s. Apple, for example, can function as an anchor store. 

Why are they called anchor stores?

Like an anchor holding a ship in place, these retailers serve as a stabilizing presence that attracts and retains customers, anchoring the shopping center’s appeal and success.

What is an example of an anchor store?

Examples include major department stores like Macy’s and Nordstrom, or big-box retailers such as Walmart and Target. They can also be luxury stores like Tiffany’s. 

What is a synonym for anchor store?

Two synonyms are marquee tenant or key tenant.

Is Apple an anchor store?

Yes, Apple can be considered a key tenant in many malls due to its brand recognition, product demand and the significant foot traffic it drives to the area.

What is the difference between anchored and unanchored retail?

Anchored retail refers to shopping centers with one or more marque tenants that draw customers, while unanchored retail lacks these major tenants, often relying on a collection of smaller retailers.

Anchored retail can count on the anchor tenant to bring in foot traffic that is likely to go on to visit smaller retailers. However, when an anchor leaves, the shopping center can struggle to stay relevant. If another tenant isn’t quickly found to fill the gap, disaster may be on the horizon.

Unanchored retail isn’t subject to fluctuating sales based on the presence (or not) of a popular anchor. But because there’s no anchor, unanchored retail centers can have a harder time attracting significant foot traffic at all. 

What are the effects of an anchor store in a shopping center?

They boost foot traffic, enhance the shopping center’s attractiveness, help in retaining and attracting other retailers and generally increase the economic performance of the mall.

What is a shadow anchor store?

A shadow anchor store is a major retailer located near but not within a shopping center, still driving traffic to the area and benefiting nearby businesses without being part of the mall’s tenant mix.

Consider Home Depot as an example. Home Depot locations are rarely attached to other stores or in malls, but are frequently near them, acting as a shadow tenant.